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A Lender vs B Lender Mortgages in Canada: Which One Is Right for You?
March 21, 2025 | Posted by: Yelena Markus
Navigating the mortgage landscape in Canada can feel overwhelming—especially if you're self-employed, have experienced credit issues, or need to consolidate debt. Understanding the difference between A lenders and B lenders is key to finding the right solution for your unique financial situation.
As a seasoned mortgage broker in Montreal, I specialize in helping individuals just like you—whether you're building back after financial hardship or navigating a complex income scenario. Let’s dive into what makes A and B lenders different, and why one may be a better fit for your needs.
???? Key Takeaways
- A lenders offer low rates with strict approval guidelines based on income, credit, and debt ratios.
- B lenders are a lifeline for borrowers who’ve faced credit challenges, have government debt, or need debt consolidation.
- Your mortgage strategy should be based on your current financial profile, future goals, and risk tolerance.
- Working with Yelena Markus, a trusted Montreal mortgage broker, ensures personalized guidance through every step.
What Is an A Lender Mortgage?
A lenders are traditional financial institutions like Canada's big banks and credit unions. They offer the lowest rates but only to borrowers who meet stringent lending criteria.
To qualify with an A lender, you typically need:
- A credit score of at least 650
- Stable and verifiable income for at least two years
- Acceptable GDS/TDS debt servicing ratios
- A minimum 5% downpayment
- To pass the mortgage stress test
What Is a B Lender Mortgage?
B lenders are alternative lending institutions such as trust companies, mortgage investment corporations (MICs), and non-bank lenders that specialize in helping Canadians who don’t qualify with A lenders.
B lenders are the go-to solution for:
- Individuals who’ve filed for bankruptcy or a consumer proposal
- Those needing to consolidate credit card debt or government debt (e.g. unpaid taxes to CRA)
- Borrowers with bruised or limited credit history
- Self-employed borrowers with less than 2 years of income history
- Anyone with non-traditional income or high net worth but low taxable income
These lenders offer flexible qualifying criteria and creative financing solutions when traditional banks say no. They do, however, require a minimum 20% downpayment and typically offer shorter terms.
A Lender vs. B Lender: Key Differences
| Qualifying Criteria | A Lenders | B Lenders |
|---|---|---|
| Credit score requirements | Minimum 650 | Minimum 500 (owner-occupied fixed rate) Minimum 600 (variable rate) |
| Required downpayment | Minimum 5% | Minimum 20% |
| Amortization | Up to 30 years | Up to 35 years |
| Lending ratios GDS/TDS (%) | 32/40 to 39/44 | 35/42 to 55/70 |
| Length of term | Up to 10 years | 1 to 5 years |
Who Should Consider an A Lender Mortgage?
You may qualify for an A lender mortgage if you have:
- Stable, salaried employment with 2+ years of consistent income
- A credit score above 650
- Low to moderate debt ratios (GDS below 39%, TDS below 44%)
- At least 5% downpayment saved
A lenders are ideal if you’re looking for the lowest possible rate and your financial profile is clean and straightforward.
Who Should Consider a B Lender Mortgage?
You might benefit more from a B lender mortgage if you:
- Are self-employed with less than 2 years of income history
- Have filed for bankruptcy or a consumer proposal
- Need to consolidate debt, including government debt (unpaid taxes, HST, etc.)
- Have a credit score below 650
- Can’t meet strict income or debt servicing requirements
- Are newly recovering from financial hardship or life changes
- Own a home with equity and need to refinance or access equity
B lenders are not “bad” lenders—they are essential partners in getting you back on track and helping you move forward.
Let Yelena Markus Help You Find the Right Lender
The difference between A and B lenders isn’t about good or bad—it’s about fit. Everyone has a different story, and the best mortgage solution is the one that aligns with your current financial reality and future goals.
As an experienced mortgage broker in Montreal, I work with both A and B lenders to:
✅ Match you with the right lender based on your situation
✅ Find you the most competitive rate possible for your profile
✅ Strategize solutions for refinancing, debt consolidation, or credit rebuilding
✅ Help you navigate paperwork and get approved with ease
Final Thoughts
The path to homeownership or mortgage refinancing doesn’t have to be stressful—even if you’ve had financial bumps along the way. Whether you're navigating self-employment, rebuilding credit, or dealing with government debts, there’s a lending solution out there for you.
???? Let’s talk about your options. Contact Yelena Markus, Top Mortgage Broker in Montreal: 438-802-3229
Frequently Asked Questions
Are B lenders more lenient than A lenders?
Yes. B lenders specialize in helping borrowers who don’t meet traditional bank criteria by offering flexible income and credit requirements.
Do B lenders require a 20% downpayment?
Yes. Since B lenders do not offer insured mortgages, they require at least 20% down for purchases or equity in your home for refinancing.
Can I get a mortgage with a bankruptcy or consumer proposal?
Absolutely. Many B lenders will work with borrowers after bankruptcy or a proposal—especially if it's been discharged and you have a downpayment.
Can B lenders help with unpaid taxes or government debt?
Yes. You can use a B lender mortgage to consolidate CRA debt, unpaid taxes, or other liabilities that traditional banks won’t finance.
